The
2011 investment of $7,143 is now worth COP 100 shares times $65.66 plus 100
shares of PSX at $79.56 or $14,522.Nice capital gain!Moreover,
Dividend income of $264 per year has now increased to $292 from COP plus $200
from PSX for a total of $492.Nice
income increase!

The
2013 investment has done well but not as well as 2011.But then nearly every stock bought in 2011
has delivered good gains.The 2013
investment of $5,984 in COP would be worth $6,566 today.The dividend would have increased from $2.64
to $2.92; an increase of 10.6%.Do you
have another investment you made in 2013 just 22 months ago that increased your
income by 10.6%?

The
2014 investment in COP is losing money.While COP met all the Dividend Machine criteria when I wrote about it,
the price of oil has killed this sector. Your investment of $80.35 would be worth
only $65.66 or a loss of 18.28%: ouch!.Your dividend of $273 would have increased to $292 for an increase of
6.959% in less than a year.

Should
you buy COP today?

I
write about the stocks I buy for the income producing portion of my portfolio
and when those stocks meet all four of my Dividend Machine criteria, I add that
stock to the current year’s model portfolio. I will add COP to the 2015 Dividend Machine model portfolio.

Sale
is one of my favorite words when I shop and COP is on sale while it meets all
the Dividend Machine criteria for 2015.I will be adding to my COP holdings but I will use the volatility of the
energy market to also sell calls on the new shares.This additional income will help salve my
wounds from the 2014 buy.

The
tables below present COP’s Dividend Machine Fundamentals and the covered call I
will sell today.

Dividend Machine Fundamentals:

Covered Call Option

Yes,
I think you should consider COP for income producing portion of your portfolio.

Monday, February 23, 2015

Historically,
bonds have been a major portion of an income investor’s portfolio.But the 30 plus year bull market in bonds
have rendered most bonds so expensive, yielding so poorly, that the average
income investor cannot afford bonds.

Those
high yield bonds that are available are hardly worth the risk.

With
all that in mind, I occasionally find the bond of a stock that has decent
fundamentals but has gotten hammered because of some outside influence.In this case, the outside influence is the
price of oil and gas.

Buy
at a Discount

When
you buy at a discount and your bond matures, you get back more money to then
reinvest.Often times, a bond will
improve so much that you can sell it early at a premium.I do not think that will happen with this
bond, yet just two years ago the bond profiled here traded at over $110. I will be very happy to get back my
principle and receive the coupon twice a year.

Noble
Holding 4.9% 2020 Senior Debt

Noble
Holding Company, symbol NE, is an oil and gas drilling company.Trading at About $18.61 today. D/E ratio of
.64 is within the industry standard of .64.Interest coverage ratio is 9.62 which is comforting.

Noble
has several bonds available in the 5 – 7 year maturity range. The bond I bought
has a coupon of 4.49%, matures August 1, 2020.Selling at a discount to par of $95.60 (price from Schwab.com) for a
Yield to maturity (YTM) of 5.857%.

This
bond is considered investment grade with a rating of Baa3 and BBB by two agencies.It is continuously callable with no survivor
option.At the very minimum you will
receive par when called and remember with bonds you receive interest income for
every day you own the bond.

CUSIP
# is 65504LAC1

Consider
this NE senior, investment grade, discount bond for the income investing
portion of your portfolio.

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Covered Call Opportunities

Square, symbol SQ, is my current favorite stock that is not a dividend machine. To turn it into an income investment, I use SQ's volatiity to buy when it dips and sell calls. See the table above. Note that this call is not included in the post published on 12/12/18 M*

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TheMoneyMadam's Story

My income investing success came from my experience managing my and other people's money since 1993. Successful income investing requires discipline. In this blog I provide specific investments based on my principles of conservative income investing. I hope to help the thousands or even millions of people who have saved and want to invest their nest eggs to retire with income that grows. M* MoneyMadam

Disclaimer

Information on this blog does not constitute investment advice. Review or mention of any stock, bond, or other investment shall not be considered a buy or sell recommendation. Everything in this blog is the opinion of the author and no warranties are expressed or implied. M*MoneyMadam.